AllI usually pen my thoughts to justify to myself and analyse my...

All

I usually pen my thoughts to justify to myself and analyse my own actions or omissions. Given the encouragement I've received on previous posts coupled with some anxiety of late on these threads I thought I'd share

Please also note my thoughts are for mid-to-long term investors, most of the below is irrelevant for day traders.

It's easy to buy or sell, difficult to hold
We're inherently impatient. When prices are going up, we hear and are tempted with "nobody went broke taking profits". My brother (a healthcare pro, not in finance) actually texted me that quote earlier today. What's your goal with spec stocks, such as MSB? Mine isn't to not be "broke". It's to achieve abnormally high returns that would be impossible if we were to sell early on in any phenomenal growth story such as [insert your favourite 50 bag ticker]. My brother, among many others, uses stop loss orders and "sell when I gain 30%" - on no deep analysis of fundamentals or valuation. Just "sell at 30%". I personally think this is a cop out and a very lazy way of chance investing. If I followed his advice recently, I would have sold at a 30% increase a few months ago on A[ ]T, as opposed to the 450%+ I've since realised. We must have conviction and be patient. However, our current issue is not selling because of an increasing price, but doubting ourselves due to a quickly decreasing price, which brings me to my next point:

Nothing has changed, except our league

If you conduct your DD, understand a business and think it's worth X; however, the price decreases to Y on no change in the story, fundamentals or outlook / announcements, you have nothing to worry about. Don't doubt yourself and don't try to forcefully create reasons as to why the price is decreasing over two days! The first part of this is very important - do your own research. Conviction cannot be borrowed. This is usually why the "bandwagon" investors are first to sell.

I've also read some comments that it could be because the trade deal with China was halted, which doesn't seem true, either:



In an earlier post I noted, and many agreed, we wouldn't sell if this was to decrease 20% or more - without any bad news. We've had no bad news. The trial is continuing and there has been a steady buy-in over the past few weeks by hospitals. This in itself is a positive - yes, it took what might seem like to us as an eternity for all hospitals to achieve "recruiting" stage - but think of it this way - if the trial wasn't going well, do you think word would not have been out across hospitals making others reluctant to sign on?

Nothing has changed on news / announcements. If anything, The Prof has spoken words with more positivity than I've heard him speak before! It isn't in his nature in the slightest to pump the share price - so when he says MSB is undervalued or a big potential upside to investors, it's would be the equivalent of a regular CEO banging his chest, doing talk shows and making TikToks.

I noted in an earlier post we will "make those silly graphs" on the AFR, and we have. Twice!

Yesterday:


and today:



I also noted the increased scrutiny will be good or bad - our movements, developments and updates will be more exaggerated than before we entered the ASX200. As such, mentally prepare yourselves for more days such as these during the lead-up to announcements. The ups will be higher and faster, conversely, the downs will be lower and just as fast. Recall my last comment "why SHOULD we keep moving up at an abnormal pace without releasing good news? Only to retrace back?". Guess what? We have / are retracing back. This is all part of holding a biotech stock, especially one with such great potential.

Different mandates / risk profiles
End of the day, we are still somewhat a spec stock. This means certain funds will not hold us, until they see more certainty. Yes, they are aware they will need to pay more if they wait for announcements - and they happily will - for a much smaller, more predictable, upside. Until then, we are the "crazies" and we cannot expect the market to share our sentiment and buy in. If they did, we'd not be able to buy at these prices.

ARDS may fail. And CLB. And advanced heart. And sr-agvhd may not be approved. Very low probability (impossible?!) of not hitting any of them - but there is a chance one or more may not pull through. The spotlight of part-informed investors is on ARDS. If this one fails, be prepared for the share price to drop anywhere between 30-60%. The upside is obviously tremendous. See below my same high-level calc. In my previous post I showed the conservative scenario, here's a moderate scenario in relation to ARDS in America, only:



I feel a bit silly sharing such high-level huge valuations, but you'll note @Lopez (may have in jest?) said skip straight to $40. If the above is possible, why can't we?

And that's why the 60% downside, for me, is worth it. Let me know if you'd like to see the aggressive scenario (or if you'd like me to change any of the blue inputs).

Lighter side
Potential multi-nic 1 of 3 posts a comment (maybe from the wrong account) with proper English. Multi-nic 2 of 3 quickly logs in and queries wow, multi 1, have you started using Grammerly?!
@ddwn - you are the beacon of MSB hope and optimism. Please don't ever feel dejected or down again!

I agree with others that this could be the big one. And as opposed to sharing with my grandkids (I don't have kids yet), I plan on sharing this growth story with my parents. I would love nothing more than to call my father and tell him he no longer needs to work - though, he isn't one to retire.

It was never my thinking that made big money for me... It was always my sitting.


Kia kaha